Question

Ravonda purchased a ring costing $30,000 by taking out a 5.5% add-on installment loan. The loan requires a 25% down payment and equally monthly payments for 4 years. How much are her monthly payments?

Answer 1

She has to pay $503.125 monthly till 4 years

Explanation:

Cost of the ring = $30000

Add on = 5.5% of the cost of the ring

=( 5.5 x 30000) /100

= $1650

Down payment = 25% of the cost

= (25 x 30000) /100

= $7500

Time = 4 years

Loan amount = 30000 - 7500

=$ 22500

Total amount to pay = 22500 + 1650

= $24150

Monthly instalment= 24150/(4 x 12)

= $503.125

She has to pay $503.125 per month till 4 years.